Oaktree Condominium Assn., Inc. v. Hallmark Bldg. Co.
11 N.E.3d 266
Ohio2014Background
- Oaktree Condominium Association discovered foundation defects (footers not below frost plane) and was notified on October 31, 2003; construction completed in 1990.
- Oaktree sued Hallmark for unworkmanlike construction on December 16, 2005 (later voluntarily dismissed and refiled August 30, 2007).
- The Ohio real-property-construction statute of repose, R.C. 2305.131, became effective April 7, 2005 and bars actions more than ten years after substantial completion, with certain limited exceptions.
- Trial court denied Hallmark’s summary-judgment repose defense; jury awarded Oaktree damages; the court of appeals ultimately held Oaktree’s suit time-barred and upheld the statute as applied.
- Ohio Supreme Court held R.C. 2305.131 unconstitutional as applied to Oaktree because the claim had accrued before the statute’s effective date and the retroactive bar violated Article II, §28; the court applied the applicable statute of limitations (R.C. 2305.09) to determine a reasonable time to sue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether R.C. 2305.131 may constitutionally bar an accrued cause of action | Oaktree: statute of repose cannot retroactively extinguish an accrued right; claim vested Oct. 31, 2003 | Hallmark: statute applies to suits filed after its effective date regardless of accrual date | Court: Retroactive application to accrued claims violates Ohio Constitution Article II, §28; statute unconstitutional as applied |
| If statute is unconstitutional as applied, what is a "reasonable time" to bring the accrued claim | Oaktree: should be governed by the relevant statute of limitations (4 years under R.C. 2305.09) | Hallmark: trial court/court of appeals used a shorter "reasonable" period (2 years) from notice/effective date | Court: Reasonableness measured by the applicable statute of limitations for the claim type; here 4 years, so Oaktree timely filed |
Key Cases Cited
- Gregory v. Flowers, 32 Ohio St.2d 48 (1972) (retroactive laws cannot unreasonably divest vested substantive rights)
- Groch v. Gen. Motors Corp., 117 Ohio St.3d 192 (2008) (when repose would retroactively bar accrued products-liability claims, a reasonable time to sue is measured by the statute’s limitations period)
- Adams v. Sherk, 4 Ohio St.3d 37 (1983) (when repose would retroactively bar an accrued medical-malpractice claim, a reasonable time to sue may follow the applicable limitations rule)
- Velotta v. Leo Petronzio Landscaping, Inc., 69 Ohio St.2d 376 (1982) (delayed-damage rule for accrual in construction-defect cases)
- Mussivand v. David, 45 Ohio St.3d 314 (1989) (elements required to establish actionable negligence)
- Sexton v. Mason, 117 Ohio St.3d 275 (2008) (tort actions for injury or damage to real property are governed by the four-year statute of limitations in R.C. 2305.09(D))